fi·du·ci·ar·y    A fiduciary is someone that is held in trust.  The word comes from the Latin words fides (meaning "faith") and fiducia (meaning "trust").  If you act as a fiduciary, you're required to act at all times for the sole benefit and interests of another, with complete loyalty to those interests.

Wouldn’t you think all financial advisors would be required to act solely in the best interest of their clients?  But, amazing as it may seem, that’s not the case.  And Wall Street is waging a major battle in the financial services industry to make sure it stays that way.

Here’s who is required to act as a fiduciary……

  • Registered Investment Advisors
  • Certified Financial Planners
  • NAPFA-Registered Financial Advisors

Here’s who is not required to act as a fiduciary…...

  • Insurance agents
  • Stock brokers
  • “Registered Representatives” of large financial services firms 

Insurance companies and brokerage firms don’t want their employees to be fiduciaries.  They’re worried that it would mean fewer product sales.  They’re also concerned that, if employees were held to the higher standards of fiduciary law, they’d face a lot more lawsuits and greater litigation costs.

It’s true.  Read any brokerage account application and you’ll see something like this in the fine print...

  • “Your account is a brokerage account and not an advisory account.”
  • “Our interests may not be the same as yours.”
  • “We’re paid by people who compensate us based on what you buy.”

Stock brokers and insurance agents are only required to avoid selling you securities that may be “unsuitable” for your situation.  They’re not required to act in your best interest. They’re not required to disclose what compensation they receive.  And they’re not required to disclose conflicts of interest.

We are fiduciaries.
At Financial Research, we act as fiduciaries at all times.

As a Registered Investment Advisor, we’re required to have a fiduciary duty to our clients.

As a Certified Financial Planner, Jay H. Cowles adheres to the Code of Ethics of the Certified Financial Planner Board of Standards, Inc. (click to see the Code)

As a NAPFA-Registered Financial Advisor, Jay H. Cowles is committed to and has signed the NAPFA Fiduciary Oath (click to see the Oath)


Fiduciary Difference
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